Global financial giants Franklin Templeton and Citigroup have announced have announced plans to adopt the Solana blockchain for their upcoming financial services.
Franklin Templeton, a $1.4 trillion asset manager, plans to launch a mutual fund natively on Solana, while Wallstreet giant Citi is exploring the blockchain’s capabilities for smart contracts and cross-border money transfers.
The announcements were made during the Solana Breakpoint 2024 event in Singapore on Sept. 20, highlighting the growing interest from traditional financial (TradFi) institutions in DeFi solutions. ‘Both firms said they view Solana as a valuable platform due to its low transaction costs and ability to support high volumes of transactions, positioning it as an ideal blockchain for their services.
Franklin Templeton’s blockchain strategy
Franklin Templeton’s decision to launch a mutual fund on the Solana blockchain highlights the asset manager’s continued integration of blockchain technology into its operations.
Mike Reed, the firm’s partnership development lead, explained during the event that Solana’s cost efficiency and scalability were key factors behind the decision. He said:
“We see blockchain as essential for driving operational efficiency and reducing costs in our financial services. Solana offers the transactional capacity we need to handle the volume of ledger entries for a mutual fund, making it the right choice for this initiative.”
The new mutual fund will operate natively on Solana’s blockchain, further cementing Franklin Templeton’s position as a leader in blockchain-based financial services.
A recent report published by the firm praised Solana’s resilience and potential for supporting a new wave of crypto innovation. Despite the risks associated with blockchain investments, the report highlighted that the network is well-positioned for the future of decentralized finance.
The move builds on Franklin Templeton’s existing presence in the crypto space. The firm already manages spot exchange-traded funds (ETFs) for Bitcoin and Ethereum, which are listed on the Chicago Board Options Exchange (CBOE).
Citibank eyes cross-border payments
Meanwhile, Citi said it is exploring the Solana blockchain’s potential to enable seamless cross-border money transfers and deploy smart contracts. According to its representatives at the event, the bank sees blockchain as the future of finance.
Citibank has already tested blockchain applications in other areas of its business, having utilized the Avalanche blockchain earlier this year to tokenize private equity funds. Solana’s scalability and speed make it a compelling option for the lender’s continued exploration of blockchain for financial services.
The announcements from Franklin Templeton and Citibank signal a broader trend of increasing blockchain adoption among major financial institutions. Solana’s ability to handle large transaction volumes at a low cost has made it an attractive platform for companies looking to streamline operations and improve efficiency.
However, regulatory hurdles remain for Solana’s adoption in some areas. The US Securities and Exchange Commission (SEC) has been hesitant to approve a Solana-based ETF, with approval odds currently estimated at only 3%, according to industry analysts.
The post Franklin Templeton, Citigroup turn to Solana for next-gen financial services appeared first on CryptoSlate.
